There are very few surprises in this years’ Federal Budget and Treasurer Joe Hockey’s announcement that “There will be no new taxes on superannuation under this Government” was music to the ears of many.

Changes to the age pension are set to hit more than 326,000 asset rich pensioners. About 91,000 part-pensioners will no longer qualify for the pension and another 235,000 will have their payments reduced. These pension changes save the government $2.4 billion, which is the biggest saving in the budget. It is very important to remember that the announcements in the budget are proposals only and may never pass into law.

It is clear that the government wants retirees to draw on more of their own savings to fund retirement. It is our responsibility to encourage all Australians to actively engage with their retirement savings and take control of improving their own living standards in the future.

The key points of interest are as follows:
• No new taxes on super – only mention of super is that terminally ill patients can access super earlier
• Age Pension-Lower threshold and taper rate increase – $3.00 a fortnight (previously $1.50) for every $1000 of assets over the asset free threshold
• Families – Extra $3.5 billion in childcare, including $246 million nanny trial
• Small Businesses- 1.5 per cent tax cut for small companies and 5 per cent tax discount on income from unincorporated small business activity. Immediate tax write-off for assets $20,000 or less.

You can click here to read the government’s budget overview and for more information on the 2015 Federal Budget, you can download budget documents from budget.gov.au.

If you would like to discuss superannuation, insurances or obtain wealth advice, please contact us on 1300 557 782 or email super-service@ajg.com.au and a member of our team will be able to assist you.

Source: Australian Financial Review.

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